World Bank’s Senior Country Economist for Lao PDR Genevieve Boyreau has said that if Lao PDR wants to sustain its growth, it is important to strike a balance between resource and non-resource sectors, pointing recent economic development is commonly linked to the natural resource sector.
“If managed well, the non-resource sector is expected to contribute more than half of Lao PDR’s real GDP growth and 75 percent of the GDP in the medium. To achieve these results, policies in Lao PDR should be creating an enabling business environment that supports the development of the non-resource sector,” said the economist.
Investment Climate Assessment report for Lao PDR workshop launching in Vientiane, November 14, 2011.
Investment Climate Assessment, recently released by the World Bank, states that the non-resource sector provides more inclusive growth options than the resources sector, such as long-term employment opportunities.
The report shows how the current investment climate could improve in order to enable an inclusive and sustainable economic growth path.
Carried out by the World Bank working closely with government agencies and development partners, the report presents suggestions on how to address fundamental challenges impeding sustainable business growth and provides constructive recommendations on how to improve the investment climate in Lao PDR.
In addition, It demonstrates primary constraints in the non-resource sector as identified by business holders, focusing on inadequate skill in the workforce and limited access to finance and taxation regimes. As the ICA explains, constraints in the business environment are experienced differently for small, medium or large enterprises and vary according to province and region.
Following the introduction of the New Economic Mechanism and the implementation of reform since 1986, the economy has expanded on average by 6.5 percent per year between 1990 and 2009. By 2010, per capita income reached U$$ 1,010 while the country’s poverty headcount was significantly reduced from 46 per cent of the population in 1992-1993 to 28 per cent in 2007- 2008.
